Stimulus Check 2023: Your Tax Refund Will Be Lower

stimulus check

For many families, the Stimulus Checks from the previous year were enormous. The average refund grew to $3,039 in 2022, a 7.5% rise from the previous year, thanks to economic impact payments, enlarged eligibility for various tax breaks, an enhanced child tax credit, and these three factors.

The IRS advises that Americans shouldn’t anticipate similar refunds this year since several pandemic-related increases to tax credits and deductions have already expired.

According to Chris McMahon, president, and chief executive officer of Aquinas Wealth Advisors in Pittsburgh, “the worst thing is that they aren’t ready for it.”

Reduced Income Thresholds For The Earned Income Tax Stimulus Check

In 2020 and 2021, the federal government granted several rounds of economic impact payments to keep the economy afloat during the COVID-19 epidemic. People who didn’t receive a direct check from the government could apply for a Recovery Rebate Credit on their tax return, often known as a stimulus check payment.

For 2021, the child tax credit was greatly enhanced, and many families also received early payments. In 2022, both of those improvements were removed.

Depending on the age of their child, parents may be eligible for a completely refundable tax credit of up to $3,600 for the 2021 tax year. Additionally, 17-year-olds could qualify for the credit. Even if a person doesn’t owe any taxes, refundable tax credits enable them to get a refund. Fewer adults without children will be eligible for the earned income tax credit this year, even though it is meant to assist low-to-moderate-income employees.

According to Corrado, “the Stimulus Check returns to its pre-pandemic standards.” If their income was under $21,430 in 2021, individual taxpayers without children were eligible for a Stimulus Check of up to $1,502.

The maximum credit for these individuals is only $560 for tax returns filed this spring, and the maximum income qualifying threshold is reduced to $16,480. For persons with children and married couples filing jointly, the income thresholds and credit amounts are greater.

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